Three strong tools the CBK uses to build confidence in financial sector

The role of the financial sector need not be overemphasised. It performs a lubricating role in every economic activity just as oil does in machinery. A critical ingredient for the financial sector to effectively perform is financial stability, which also underpins public confidence in the sector.

This brings me to the role played by Kenya Deposit Insurance Corporation (KDIC) in the financial sector. By being an insurer of bank deposits, its existence encourages depositors to entrust their hard-earned savings to the deposit-takers. Unlike the traditional Deposit Protection Fund, KDIC has an additional mandate of ensuring the going concern of its premium payers, the banks. This explains the close working relationship between CBK and KDIC. They both have complementary mandates of financial stability.